Thursday, December 8, 2022

Ramesh 'Sunny' Balwani is sentenced to prison for Theranos fraud

Ramesh 'Sunny' Balwani gets prison time for Theranos fraud

CAPE CANAVERAL: A top aide and ex-boyfriend of Theranos founder Elizabeth Holmes was handed a prison sentence on Thursday for tricking people into trusting the failed blood testing startup.

Ramesh "Sunny" Balwani was given a sentence of nearly 13 years in prison and then three years of supervised release by Judge Edward Davila of the US District Court for his part in what prosecutors said was a massive fraud committed against Theranos investors and patients.

On March 15, Balwani is expected to surrender in order to be detained.

An appeals court has denied Balwani's request to overturn Holmes' fraud conviction and subsequent sentence of more than 11 years in prison, as her fraud trial was separate from Balwani's.

In her appeal, Holmes stated that she is challenging "any and all adverse rulings incorporated in, antecedent to, or ancillary to the judgment," as well as the November prison sentence.

After an investigation by The Wall Street Journal, she was found guilty of four counts of felony fraud in January for convincing investors that she had developed a revolutionary medical device prior to the company's collapse.

According to the court, Balwani was found guilty on all 12 counts of fraud brought by federal prosecutors.

In a sector that is littered with the skeletons of failed startups that once promised untold riches, Holmes and Balwani are one of the few examples of tech executives facing charges due to a young company that is not living up to its hype.

According to an order issued by Davila, who presided over both trials in a San Jose, California, courtroom, Holmes, who is pregnant, will not have to surrender until April of next year.

When she said that her start-up was perfecting a simple test kit that could perform a wide range of medical diagnostics with just a few drops of blood, the 38-year-old became a Silicon Valley star.

Holmes described Balwani as a controlling force at Theranos during her trial.

The hazy distinction between industry hustle and outright criminal dishonesty was brought to light during her trial.

In a federal courthouse in San Jose, US prosecutor Robert Leach told jurors that Holmes and 57-year-old Balwani piloted the company and were "partners in everything, including their crime."

However, Holmes and Balwani each denied the charge in court, arguing that they truly believed that Theranos's failure was not fraud.

Balwani, who was nearly Holmes's age when she started the company in 2003, was brought in to help run it.

Prosecutors said that Holmes and Balwani knew the technology didn't work as advertised, but they kept telling patients and investors who invested in the company that it was revolutionary.

Theranos flourished, attracting prominent figures like Henry Kissinger and Rupert Murdoch. However, a series of reports from Murdoch's own Wall Street Journal that cast doubt on the company's claims sparked the company's demise. 

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